solution to our financial problem
Discussion
what would happen if the government "printed" more money and gave £10,000 for example to every single person who is 18 or older on 1st October 2011.
The advantages of this would mean that so many people have money to pay off credit cards/loans etc and they would also be able to spend the money on things too.
The obvious issue is that it would increase inflation but what if we said you can only use it to pay off debt or save the money in a fixed savings account and only spend a bit of it each year or something.
the government wouldn't have any more debt as it has printed this money, people would be better off and inflation may go up but would this be a small price to pay?
where's the flaw?
The advantages of this would mean that so many people have money to pay off credit cards/loans etc and they would also be able to spend the money on things too.
The obvious issue is that it would increase inflation but what if we said you can only use it to pay off debt or save the money in a fixed savings account and only spend a bit of it each year or something.
the government wouldn't have any more debt as it has printed this money, people would be better off and inflation may go up but would this be a small price to pay?
where's the flaw?
jonah35 said:
what would happen if the government "printed" more money and gave £10,000 for example to every single person who is 18 or older on 1st October 2011.
The advantages of this would mean that so many people have money to pay off credit cards/loans etc and they would also be able to spend the money on things too.
The obvious issue is that it would increase inflation but what if we said you can only use it to pay off debt or save the money in a fixed savings account and only spend a bit of it each year or something.
the government wouldn't have any more debt as it has printed this money, people would be better off and inflation may go up but would this be a small price to pay?
where's the flaw?
Gordon, is that you?The advantages of this would mean that so many people have money to pay off credit cards/loans etc and they would also be able to spend the money on things too.
The obvious issue is that it would increase inflation but what if we said you can only use it to pay off debt or save the money in a fixed savings account and only spend a bit of it each year or something.
the government wouldn't have any more debt as it has printed this money, people would be better off and inflation may go up but would this be a small price to pay?
where's the flaw?
Bing o said:
Gordon, is that you?
lol, seriously though, i know it sounds like gordon etc but tell me the flaw, where is the flaw? i presume there are many flaws but tell me where it isif it would create too much inflation how about giving everyone say £2k instead.
in my (very experienced) eyes I can see that QE isn't working here or in america because the QE isn't getting out into the wider system ie the banks are keeping it which is why, for example, inflation in the us hasn't gone up much despite QE. therefore, why not bypass this and get it to the grass roots level?
0a said:
Can I have £100,000 - not a problem as it's free, right? "people would be better off", why not make me £100,000 better off?!
because that would be too much, that would create too much inflation and it would seriously distort asset prices and is plain silly.i know there will be lots of funny comments on here about this idea, but rather than just joke please keep it professional and explain why this idea is worse than QE/ZIRP/the 3 trillion euro bailout we are embarking upon etc etc
jonah35 said:
what would happen if the government "printed" more money and gave £10,000 for example to every single person who is 18 or older on 1st October 2011.
The advantages of this would mean that so many people have money to pay off credit cards/loans etc and they would also be able to spend the money on things too.
The obvious issue is that it would increase inflation but what if we said you can only use it to pay off debt or save the money in a fixed savings account and only spend a bit of it each year or something.
the government wouldn't have any more debt as it has printed this money, people would be better off and inflation may go up but would this be a small price to pay?
where's the flaw?
Be a chain smoking chav, fraudulently claim 60k in benefits, and get a suspended sentence. Superb. The advantages of this would mean that so many people have money to pay off credit cards/loans etc and they would also be able to spend the money on things too.
The obvious issue is that it would increase inflation but what if we said you can only use it to pay off debt or save the money in a fixed savings account and only spend a bit of it each year or something.
the government wouldn't have any more debt as it has printed this money, people would be better off and inflation may go up but would this be a small price to pay?
where's the flaw?
CaptainSlow said:
i've read that beforeit states qe 'stimulates the economy' which my idea would
it states that qe can help ensure that inflation doesn't fall below target, again my idea would help boost inflation
but you can see the problems with qe as i was discussing only last week with someone high up at seven investment management which was the fact that the banks are holding onto the money and not lending more. My idea bypasses this and ensures the money gets to the grass roots level.
so, so far people have mocked me which is ok
but haven't actually written a good argument on exactly WHY this is worse than QE.i'm sure there are many, but rather than just a friendly mocking comment, please actually give an argument.
johnfm said:
I estimate 77.5% of the population are aged over 18.
So, about 44 million.
Times £10,000
That is a bi chunk of QE - circa £450 billion.
ok, thanks for the response john.So, about 44 million.
Times £10,000
That is a bi chunk of QE - circa £450 billion.
So, we have done £200bn of QE so far.
Let's say we wanted to do another £100bn then we'd need to give everyone around £2500 which to me still seems like a worthwhile amount to give out. that would get so many people out of car finance deals, get their credit cards clear and help get them out of their overdraft etc.
so, what's wrong with this?
The Fed Reserve Chief, Bernanke said he'd drop cash from a helicopter (Milton Freidman's original suggestion) to sort out the US' issues if QE didn't work - QE didn't work of course and there's no helicopter although the issue is of course, no cash to give away in the first place...
Edit: it's hard enough for the Govt to sell its bonds these days - if it had to issue more to fund some cash give away it would only add to the problem.
Edit: it's hard enough for the Govt to sell its bonds these days - if it had to issue more to fund some cash give away it would only add to the problem.
Edited by donna180 on Sunday 25th September 16:55
jonah35 said:
Let's say we wanted to do another £100bn then we'd need to give everyone around £2500 which to me still seems like a worthwhile amount to give out. that would get so many people out of car finance deals, get their credit cards clear and help get them out of their overdraft etc.
so, what's wrong with this?
Your idea of giving people money to pay off loans, credit cards, etc sounds like a very socially responsible one. Sadly most people aren't responsible. If you give £10k to someone who has £12k of unsecured debt the last place it would go in 8/10 cases is towards paying down that debt. so, what's wrong with this?
We have a generation of people who view finance as a way of life and see things in terms of monthly payments regardless of the total cost to them. £10k would allow them to buy £10k more stuff or place deposits on £30k of stuff.
jonah35 said:
johnfm said:
I estimate 77.5% of the population are aged over 18.
So, about 44 million.
Times £10,000
That is a bi chunk of QE - circa £450 billion.
ok, thanks for the response john.So, about 44 million.
Times £10,000
That is a bi chunk of QE - circa £450 billion.
So, we have done £200bn of QE so far.
Let's say we wanted to do another £100bn then we'd need to give everyone around £2500 which to me still seems like a worthwhile amount to give out. that would get so many people out of car finance deals, get their credit cards clear and help get them out of their overdraft etc.
so, what's wrong with this?
FAOD, I do not believe the usual PH line that all those in the s
t were/are feckless.The sad fact is what I call the myth of 'growth' during the Labour boom years.
If you strip out the growth fuelled by borrowing (and just look at growth fuelled by increased earnings) - I expect the world is roughly where it would have been at 2-3% growth.
Sadly, the world borrowed its way to a point where everyone would buy desinger jeans (£300+), handbags (£800+), HD plasma tvs, 3 holidays a year etc - but pay wasn't going up.
Your suggested merely reinforces the concept of spending unearned income.
It's a good exercise to think about this, I agree. For a start it would be an effective transfer of wealth from savers (who would lose out through inflation) to those that spend everything or are in debt and most would consider this unfair and distortionary.
Inflation is running at around 5% already, and as stated the effect would be more than double the £200bn I understand the BofE have injected so far, the magnitude of this distortion would therefore be pretty high .
Inflation is running at around 5% already, and as stated the effect would be more than double the £200bn I understand the BofE have injected so far, the magnitude of this distortion would therefore be pretty high .
donna180 said:
The Fed Reserve Chief, Bernanke said he'd drop cash from a helicopter (Milton Freidman's original suggestion) to sort out the US' issues if QE didn't work - QE didn't work of course and there's no helicopter although the issue is of course, no cash to give away in the first place...
Edit: it's hard enough for the Govt to sell its bonds these days - if it had to issue more to fund some cash give away it would only add to the problem.
ok i know exactly how qe works by buying back gilts etc but how about in this case if they just literally printed more money and gave it to everyone and didnt' actually buy back gilts?Edit: it's hard enough for the Govt to sell its bonds these days - if it had to issue more to fund some cash give away it would only add to the problem.
Edited by donna180 on Sunday 25th September 16:55
Chrisw666 said:
Your idea of giving people money to pay off loans, credit cards, etc sounds like a very socially responsible one. Sadly most people aren't responsible. If you give £10k to someone who has £12k of unsecured debt the last place it would go in 8/10 cases is towards paying down that debt.
We have a generation of people who view finance as a way of life and see things in terms of monthly payments regardless of the total cost to them. £10k would allow them to buy £10k more stuff or place deposits on £30k of stuff.
ok but i think many people would pay off debts and you could almost argue you should pay it directly to the creditors in this case. also if they did spend it at least it would help the economy.We have a generation of people who view finance as a way of life and see things in terms of monthly payments regardless of the total cost to them. £10k would allow them to buy £10k more stuff or place deposits on £30k of stuff.
HowMuchLonger said:
You know all those goods that we import....food, fuel, etc.......what do you think will happen to the price of these?
Queue Zimbawe levels of queues with wheel barrows of notes to buy a loaf of bread.
well the boe say that inflation is going to go downQueue Zimbawe levels of queues with wheel barrows of notes to buy a loaf of bread.
i presume now you are talking about exchange rates as obviously it wouldn't affect the cost of things from abroad in any other way?
that said if inflation is on its way down then this solution may not be that bad - it will have a similar effect on inflation as qe did. they reckon that made about 1-1.5% difference in inflation which isn't too bad.
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